Watts Water(US:WTS)2026-02-11 21:44Financial Performance - Fourth quarter 2025 sales reached $625 million, a 16% increase on a reported basis and 8% organically[4] - Full year 2025 sales totaled $2.44 billion, up 8% on a reported basis and 5% organically[4] - Net income for 2025 was $340.8 million, up 17.0% from $291.2 million in 2024[23] - Operating income rose to $448.1 million in 2025, a 14.8% increase compared to $390.4 million in 2024[28] - Diluted EPS for Q4 2025 was $2.50, a 24% increase from $2.02 in Q4 2024; adjusted diluted EPS was $2.62, up 28%[4] - Diluted earnings per share increased to $10.17 in 2025 from $8.69 in 2024, marking a growth of 17.0%[28] - Total segment net sales for Q4 2025 reached $652.1 million, a 14.8% increase from $568.6 million in Q4 2024[29] - Net sales from external customers for the year ended December 31, 2025, were $2,438.5 million, up 8.3% from $2,252.2 million in 2024[30] Operating Metrics - Operating margin for Q4 2025 was 18.2%, an increase of 170 basis points compared to Q4 2024; adjusted operating margin was 19.0%, up 220 basis points[4] - The operating margin improved to 18.4% in 2025 from 17.3% in 2024[28] - The operating margin for the year ended December 31, 2025, improved to 18.4%, up from 17.3% in 2024[31] - Adjusted operating income for 2025 was $477.2 million, compared to $399.6 million in 2024, reflecting a 19.4% increase[28] - Segment earnings for Q4 2025 were $133.4 million, compared to $103.8 million in Q4 2024, reflecting a significant increase in profitability[29] Cash Flow and Assets - Operating cash flow for full year 2025 was $402 million, with free cash flow of $356 million, reflecting an 11% and 7% increase respectively[11] - Cash and cash equivalents at the end of 2025 were $405.5 million, an increase from $386.9 million in 2024[23] - Total current assets grew to $1,286.1 million in 2025, up 18.7% from $1,083.5 million in 2024[21] - Free cash flow for the year ended December 31, 2025, was $356.3 million, compared to $331.7 million in 2024, indicating strong cash generation[31] Acquisitions and Growth - The company completed acquisitions of Haws Corporation, Superior Boiler, and Saudi Cast, enhancing product portfolio and geographic presence[3] - Business acquisitions in 2025 amounted to $257.1 million, significantly higher than $96.3 million in 2024[23] - Full year 2026 sales growth is anticipated to range from 8% to 12% on a reported basis and 2% to 6% organically[13] - The company forecasts net sales growth of 8% to 12% for 2026, with organic sales growth projected at 2% to 6%[36] - The adjusted operating margin for 2026 is expected to be between 19.1% and 19.7%, indicating a focus on operational efficiency[36] Balance Sheet and Equity - Total assets increased to $2,881.2 million in 2025 from $2,397.0 million in 2024, representing a growth of 20.2%[21] - Total stockholders' equity reached $2,027.7 million in 2025, up from $1,707.9 million in 2024, indicating a 18.7% increase[21] - The net debt to capitalization ratio improved to (11.4)% as of December 31, 2025, compared to (12.5)% in 2024, reflecting a stronger balance sheet[34] Regional Performance - Americas segment sales were $467 million, a 17% increase on a reported basis and 10% organically, driven by favorable pricing[8] - Europe segment sales increased to $120 million, a 10% rise on a reported basis, with a 1% organic growth[9] - APMEA segment sales reached $39 million, a 15% increase on a reported basis and 9% organically, with growth across major countries[10] Special Items - The corporate operating loss excluding special items for Q4 2025 was $(14.7) million, compared to $(12.9) million in Q4 2024[29] - The dollar change in net sales for Q4 2025 was $84.7 million, with a net sales percentage increase of 15.7% year-over-year[30]